What the rise of the niche and nano-creator means for influencer marketing

By Kimeko McCoy • December 26, 2024 •

Ivy Liu

The so-called TikTok-ification of social media, in which the platform’s short-form, viral, and algorithm-driven content, has fueled the exponential growth of the influencer marketplace and creator economy. As it swells, marketers are tasked with allocating ad dollars to maximize return on investment. As it stands, smaller, more niche creators are delivering the best bang for buck, according to five influencer marketing execs Digiday spoke to for this story.

That means general lifestyle influencers have to adapt and find a niche or run the risk of fizzling out.

“It’s attention, really,” said Sophie Crowther, global talent partnerships director at Billion Dollar Boy, and head of creators at FiveTwoNine, the influencer marketing shop’s creator community membership program. “Attention is in new formats, new creators that are tapping into something completely brand new, basically.”

TikTok’s algorithm is likely the catalyst for this democratization in the influencer ecosystem, transforming a new breed of content creators: news sources, cultural critics, fashion designers and home cooks. Increasingly, these more specialized creators are what advertisers are pursuing as opposed to general influencers with broad appeal, according to influencer experts.

To put some numbers to it, in 2023, an estimated 60% of Sway Group influencer marketing shop’s client proposals called for niche influencers. In 2024, that number climbed to 75%, according to Danielle Wiley, founder of Sway Group.

“Certainly, the interest in really niche areas is growing tremendously, and most of the brands that we work with really want to find people who fit a certain category,” Wiley said. For example, she added, a kid’s snack brand may opt to work specifically with a content creator whose content is specifically packed lunches rather than a general lifestyle content creator who encompasses everything from food to fashion.

And if clients aren’t asking for smaller, more niche creators, agencies are advising clients to go after them. Crowther said Billion Dollar Boy is “increasingly going after the more hyper-specific [creators] where we can just because there may well be white spaces.”

Meaning, the influencer marketplace and creator economy are likely saturated at this point. It’s not something that the industry has been able to put numbers to considering there’s no universally accepted definition of what constitutes an influencer or content creator. Still, brands are more often than not looking to partner with an influencer who stands out, has expertise and a loyal following. It’s a matter of so-called thumb-stopping content, wherein niche audiences are likely to be more invested in hyper-specific, specialized content than generalized relatable lifestyle posts.

And where eyeballs are, advertisers follow. The numbers say as much. Data from HypeAuditor reported that nano-influencers have the highest engagement rates (2.53%) compared to mega influencers (0.92%) with more than a million followers.

“The spend is absolutely skewing far more towards the nano and the micro influencer over the follower count just because of the genuine connection they have with their audiences,” said Gregory Curtis Jr., director of influencer strategy at Empower Media.

For example, Curtis Jr. added, a recent clothing brand client activation spent $100,000 across six mid–tier influencers (between 100,000 and 500,000 followers). Another $150,000 was dedicated to 30 nano and micro influencers.

“Their CMO had a whole epiphany,” Curtis Jr. said, adding that early results seem promising in terms of engagement and click-thru rates. (He did not provide specific metrics.) The brand’s Q1 budget is “far more conservative” to spend less across smaller, more niche influencers who can provide target engagement metrics, he said.

The trend has been building since at least this time last year when Digiday reported that TikTok creators were increasingly creating food-centric content to diversify, open themselves up to more brand opportunities.

Going into 2025, agency execs expect the trend to continue, and that’s due to a few factors: Marketers have increasingly been under scrutiny to tie marketing to business goals, holding CMOs accountable for working media dollars. If more niche creators are getting eyeballs and engagement, they’ll get the ad dollars too. At the same time, in a saturated, yet fast-paced, digital marketplace, influencers and creators may find themselves leaning into specialized content to stay relevant, execs say.

That’s not to say the lifestyle influencer ceases to exist. A more general influencer is appealing to brands with broad appeal, like consumer packaged goods, per the execs. That is to say, however, that it’s more important to listen and follow audiences.

“Whether you’re a lifestyle creator or a fitness creator or a fashion creator, if you just do the same thing, it will be tricky to sustain an audience, sustain brand deals and sustain engagement,” Crowther said.

What the rise of the niche and nano-creator means for influencer marketing

As the creator economy swells, niche creators stand out capturing user attention and advertiser dollars.